GBG USA, an indirect wholly-owned subsidiary of Global Brands Group Holding Limited, has announced that the North America wholesale business and certain subsidiaries and affiliates have commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of New York.
The Group’s global brand management and Europe wholesale businesses are separate legal entities from GBG USA, not included in this filing and continue to maintain ongoing operations.
In conjunction with the filing, GBG USA has entered into an asset purchase agreement with WH AQ Holdings (as purchaser) and Hilco Brands (as guarantor) (together, the “Stalking Horse Bidder”), pursuant to which the Stalking Horse Bidder will serve as the stalking horse bidder in a court-supervised sale process for GBG USA’s Aquatalia brand and business. The stalking horse bid provides a purchase price of $17.3 million and the APA is subject to higher offers, among other conditions.
GBG USA is also pursuing the sale of a substantial portion of its remaining assets, including Ely & Walker, AIRBAND, MagnaReady, Yarrow, b New York and JUNIPERunltd.
“Over the past 18 months the retail landscape has been greatly impacted by COVID-19, creating hardships for us and many others across our industry,” says Rick Darling, chief executive officer, Global Brands Group. “Our business has also been impacted by ongoing structural shifts in the retail industry, as well as persistent geopolitical tensions that have disrupted supply chains. These factors have been especially detrimental to GBG USA. We have taken significant steps over the last year to strengthen GBG USA’s financial position while also conducting a thorough review of all strategic options for GBG USA and its brands. This process resulted in the successful sales of our South Korean Spyder retail operation, the inventory and related assets for two of our brands, Spyder and Frye, and an APA for our Aquatalia brand and business. As for GBG USA’s remaining assets, we determined that a Court-supervised process to facilitate a sale is the best course of action to maximize value for all stakeholders and address the financial position of GBG USA and the Group in a fair and transparent manner. GBG USA has compelling brands and products and a highly talented team, and we believe this process represents the best opportunity for GBG USA’s employees and business. The U.S. proceedings do not involve the Group’s separate European wholesale and Brand Management businesses, which are continuing to maintain ongoing operations. We have taken and continue to take measures to help improve performance, reduce the cost base and improve working capital of the European wholesale business. The Brand Management business remains robust and profitable. I am extremely grateful to our employees across the globe who have demonstrated agility and dedication while continuing to serve our customers and supply chain partners in this period of uncertainty.”